The British Columbia provincial government is not responding sufficiently to the risks posed by the unrestricted entry of foreign money in Vancouver’s real estate market, according to an observer.
In a May 31 subscriber exclusive piece for The Globe and Mail
, Jeffrey Simpson pointed at estimates that put Chinese spending in offshore assets at around $1 trillion just over the past year alone as the main factor inflaming Vancouver housing prices to nigh-insurmountable heights.
“We’re not talking about private or public companies making investments, but well-to-do-Chinese who want some or most of their money somewhere else,” Simpson wrote. “For reasons of absurd political correctness, it is considered in some quarters racist to mention that Chinese money has been buying up property everywhere in B.C.’s Lower Mainland. Where do people think it’s coming from? Azerbaijan? Indonesia? Australia?”
Recent figures revealed that much of the city’s properties are purchased for investment purposes, further aggravating the situation in a market already plagued by scarce supply and price wars.
“Houses and condominiums bought for inflated prices remain unoccupied. Housing inflation is on everyone’s lips, including companies and universities that have trouble attracting talent because would-be employees cannot find any reasonably priced housing,” Simpson stated.
The government’s so far tepid response won’t definitely resolve the issue, and would only lead to a back-and-forth of blame-throwing between Vancouver officials and the B.C. authorities, the analyst said.
“[Premier] Clark’s relative indifference to what is happening is strange, she being a self-styled populist,” Simpson wrote. “Perhaps Ms. Clark thinks that this Chinese money is a vote of confidence for the province and her government.”
“Perhaps, given that her party gets so much money from local real estate developers, she’s reluctant to pluck their golden geese,” he argued. “Her lack of interest on this matter is equal to her abdication of responsibility for Lower Mainland transit when she put a long-term transit plan to a plebiscite rather than having her government take charge.”
“The plebiscite lost. So did the Vancouver area.”